Miguel is a wine connoisseur and has a collection of wine glasses to use with different kinds of

wine. He is always looking to expand his collection and often receives barware as gifts from friends.

According to the media, the manufacturer of his favorite wine glasses, Clear Leigh, has been having

financial difficulties. The only information disclosed is that the champagne flutes may be discontinued

due to poor sales.

According to the financial information disclosed below, there certainly seems to be a problem.

Red White Champagne Clear Leigh Total

Sales $$400,000$ $$325,000$ $ $125,000$ $$850,000$

Variable costs $170,000150,00045,000365,000$

Contribution margin $$230,000$ $$175,000$ $ $80,000$ $$485,000$

Fixed costs $110,000100,00090,000300,000$

Operating income$/($loss$)$ $$120,000$ $ $75,000$ $ $(10,000)$ $$185,000$